Home NewsCyprus News: Cyprus Pillar Two – Latest Developments and Compliance Requirements

Cyprus News: Cyprus Pillar Two – Latest Developments and Compliance Requirements

Overview

The Cyprus Tax Department (CTD) has recently released additional guidance and announcements clarifying the practical implementation of the Cyprus Pillar Two Law (Law 151(I)/2024). These updates focus on filing obligations, administrative procedures, and the operationalisation of the reporting framework for the first reporting period (FY 2024).

A key administrative concession has also been introduced, providing taxpayers with additional time to comply without penalties.

 

Key Highlights

  1. Administrative Relief

The CTD confirmed that no penalties, interest or surcharges will apply for late submissions or payments, provided all obligations are settled by 30 September 2026.

 

  1. Recognition of Cyprus Income Inclusion Rule (IIR)

Following guidance issued by the European Commission:

  • Cyprus is recognised as applying a Qualified Income Inclusion Rule (QIIR) for fiscal years starting from 31 December 2023 onwards.
  • Cyprus will participate in automatic exchange of information under DAC9, supporting cross-border compliance.
  • Where a group files centrally in Cyprus, additional filings in other EU Member States should not be required.

 

  1. Pillar Two Filing Framework Now Operational

The CTD has activated the full compliance framework through the Tax For All (TFA) portal, including:

  • Electronic submission of notifications and returns
  • Availability of detailed submission guides (Greek and English)
  • XML-based filing requirements supported by XSD schemas

 

Core Compliance Obligations

  1. GloBE Information Return (GIR / TTIR)
  • Must be filed within 18 months from the end of the reporting year (i.e. by 30 June 2026, where applicable).
  • Central filing is permitted, removing the need for separate local filings where:
    • Filed by the Ultimate Parent Entity (UPE) in Cyprus; or
    • Filed in another qualifying jurisdiction with exchange arrangements in place.

 

  1. Local Notifications

Each Cyprus Constituent Entity (or a designated entity) must submit:

  • One-off Notification (group and entity identification details)
  • GIR Notification (identifying the filing entity and jurisdiction)

These filings are due within the same timeline as the GIR.

 

  1. IIR Top-Up Tax Return
  • Required from Cyprus parent entities subject to IIR.
  • Must be filed even if no tax is payable.
  • Any tax due must be settled within 30 days following the GIR deadline.

 

  1. Amendments (Revised Filings)

The framework allows for the submission of revised GloBE returns, in line with the provisions of the Cyprus Pillar Two Law.

Submission Process

  • All filings are made electronically through the TFA portal
  • Local notifications and IIR returns can be submitted manually
  • The GIR must be submitted via XML upload
  • Filings may be submitted directly or via authorised representatives

What This Means for Businesses

Multinational groups with a Cyprus presence should:

  • Assess eligibility for central filing options
  • Ensure systems are prepared for XML-based reporting requirements
  • Monitor deadlines closely, particularly the June 2026 and September 2026 milestones
  • Coordinate internally to ensure consistency across jurisdictions

 

Next Steps

Taxpayers should begin preparing the necessary data and reviewing group structures to ensure timely and accurate compliance with Pillar Two requirements.